ecce webinar. for the love of humanity: an exploratory study of what drives dutch millionaires to...

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For the love of humanity: an explorative study of what drives Dutch millionaires to give

away wealth

ECCE Webinar series

24 September 2014

M. Alexander Röntgen

[email protected]

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Today’s agenda:

Introduction

Literature review: defining millionaire-philanthropy

Methods: exploratory research

Findings: building a theoretical model

Conclusions

Introduction Theoretical framework Methodology Findings Conclusions

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Brief history:

“A state of “well-educated habits” [eùágôgos êthous] stemming from

“love of humans” [ànthrô’pon philían]. A state of being “productive of benefit” [eùergetikê]

to humans. A state of “grace” [cháritos]. Mindfulness [mnê’mê] together with

“good works” [eùergesías]."

- Definition attributed to Plato (approx. 2450 years ago)


“Private giving for public causes”

- F. Ostrower (1997)

“The practice of giving money and time to help make life better for other people”

- Online dictionary

Philo = love for, friend of Anthropos = humanity, mankind“Philanthrôpía”

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Defining philanthropy (extending Bekkers, 2013):

4

Prosocial

behavior

FormalInformal

Antisocial

behavior

Philanthropy

Elite

philanthropy

Volunteering

Charity

Lending a

helping

hand

Support to

a family

member

Open-ended

software

development


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Drivers of pro-social behavior:

5

“The other”

Pure altruism

- Public outcomes (Vesterlund, 2006)

“The self”

Impure altruism

“The context”

Situationality

- What others do (Meier, 2006)

- Social norms, “noblesse oblige”

- Tax regulations

- Warm glow (Andreoni, 1990)


- Prestige (Harbaugh, 1998)

- Self-image (Clary et al, 1998)

Andreoni (1990) extends the altruism model

with a warm glow motive for giving. Not only

do people care about the utility of the recipient,

they also receive benefit from their pro-social

behavior per se.

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6

Prosocial

behavior

FormalInformal

Philanthropy

Volunteering

Charity

Lending a

helping

hand

Support to

a family

member

Open-ended software

development


Dutch elite

philanthropy

95% of wealthy individuals donate to charity

Most potent givers: males who started own

business

1. Healthcare

2. International aid

3. The environment

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Theoretical conclusions:

Substantial research on the topic of prosocial behavior in general

Attention to prosocial behavior of ultra-philanthropists mainly from the US

Studies with Dutch millionaires as the unit of analysis scant

Philanthropy in the Netherlands mainly explained in terms of

demographics

Extant research overlooks qualitative research designs


“When little is known about a phenomenon, qualitative methods

are advocated for their ability discover the underlying nature of

the phenomenon in question” (Strauss and Corbin, 1990).

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Research questions:


This discussion leads us to the following research questions:

Research question 1: What are the benefits – both personally and

publicly – as perceived by wealthy individuals in the Netherlands to

give away private wealth for the public good?

Research question 2: How do wealthy individuals in the Netherlands

shape their philanthropic agendas and what – if any – criteria do they

place on those at the receiving end?

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Private banking clients banking with ABN Amro MeesPierson

Purposive sampling (convenience sampling)

Fourteen wealthy individuals agreed, in thirteen interviews (one as a couple)


N=13

Gender Male (10)

Female (4)

Avg. age 54.9 (ranging between 30 and 72)

Investing vehicle Direct gifts, charity foundations, crowdfunding

Origin of wealth Inherited (6)

Own enterprise (7)

Sample

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In-depth interviewing, semi-structured

format, S1-2014, two researchers

Enter the interviewee’s world and

understand the philanthropist behind

his or her philanthropy

Recorder, with consent and further

analysis in full confidentiality

Data collection: from respondent to informant (Yin, 2009)

Introduction Theoretical framework Methodology Findings Conclusions 10

Median: 01:19:52

Min: 00:40:27

Max: 01:42:23

Length of interviews:

Average:

01:16:44

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Interviews transcribed verbatim and imported to NVivo 10 Software for qualitative

analysis.

Coding is the proven method of “meaning condensation” (Lee, 1999) and refers to the

process in which researchers extract the most relevant themes from the data, and

arrange them hierarchically to form relationships.

Grounded theory (Glaser and Strauss) in which codes are derived inductively and

ultimately selected by the researchers.

Data analysis


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Philosophy

Act of

philanthropy

(selection criteria)

Impact

Findings (1): conceptual model


Intrinsic motivations Extrinsic motivations

Combination intrinsic

and extrinsic

Ex ante In medias res Ex post

Ph

ilan

thro

pic

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Findings continued (2a): Intrinsic motivations

13

Sub-themes Unique

frq*

(%)**

Exemplary quotes

Positive

psychological

effects (joy,

happiness,

gratitude)

12 (92) "Investing brings this great sensation, I can help humans and society, and

this equals value. That value means good feeling [...] And sure, it's a drop

in the ocean, but what a delight to be able to do it."

"I've given those people the possibility to start a new life. What that means

cannot be expressed in terms of money. It gave me more satisfaction

than setting up a 80 million euro company.“

"When I'm asked 'Do you have a budget?', I reply, 'Yes, you'll get the same

as I get: a lot of applause.' And people will help you, everyone is prepared

to help."

Altruism 5 (38) "I was able to truly give meaning to someone else's life. I intended to

rebuild four houses for the community, but ended up building sixty; a small

village."

Natural drive 1 (8) "So we felt this natural drive - the best drive one can have - to make

things happen, in very innovative ways."

Spiritual sense-

giving

1 (8) "What I now do for others may free up karma. I'm here for a reason, life

is a journey not a destination, we must keep learning and accomplish many

things. I kind of try to build up a reserve, since there will also come a time

when I'll be making up the balance."

(n=13) * Unique frequencies represent number of interviewees that indicated the mentioned theme

** Percentage represents the percentage of the sample that indicated the mentioned theme

"I've given those people the possibility to start a new life. What that means cannot be expressed in terms of money. It gave me more satisfaction than setting up a 80 million euro company.“

"When I'm asked 'Do you have a budget?', I reply, 'Yes, you'll get the same as I get: a lot of applause.' And people will help you; everyone is prepared to help."


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Findings continued (2b): Extrinsic motivations

14

Sub-themes Unique

frq*

(%)**

Exemplary quotes

Social norms

(family

tradition, "het

hoort zo")

3 (23) "Partly it's the upbringing, certain norms and values. I intend to keep

doing what I do because we are so privileged here in the Netherlands. I

believe that we should respond to this crisis by sharing our knowledge,

time and money, rather than containing it.”

"It doesn't give me a clear sensation. It's more that I think: you ought

not to keep everything for yourself, you should also give to others."

Identifying a

need

3 (23) "At the time of the tsunami, I witnessed the despair. I got this

epiphany: Go and fix this. Because I like challenges. As if I was pushed

forth. Then after I started, I simply didn't stop."

"Partly it's the upbringing, certain norms and

values. I intend to keep doing what I do because

we are so privileged here in the Netherlands. I

believe that we should respond to this crisis by

sharing our knowledge, time and money, rather

than containing it.”


"At the time of the tsunami, I witnessed the despair. I

got this epiphany: Go and fix this. Because I like

challenges. As if I was pushed forth. Then after I

started, I simply didn't stop."

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Philosophy

Act of

philanthropy

(selection criteria)

Impact




and extrinsic


Ph

ilan

thro

pic

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da

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Findings continued (2c): Combination intrinsic and extrinsic motivations

16

Sub-themes Unique

frq*

(%)**

Exemplary quotes

Contributing to

a better world

3 (23) "Yes, we are fortunate enough with our lives to be able to contribute

to filling the gaps in society. The idea is most likely the surplus of

energy, of resources, which I intend to allocate more accurately than

by mere taxation."

Giving back to

society

3 (23) "I wanted to give back to the countries and communities that have

enabled me to grow my business. Sure, we provided labour to the

communities, but mind you: not everyone shared in that success. Many

are overlooked. I wanted to give back to particularly those people, the

poorest who usually get to be neglected."


"I wanted to give back to the countries and

communities that have enabled me to grow my

business. Sure, we provided labour to the

communities, but mind you: not everyone shared in

that success. Many are overlooked. I wanted to give

back to particularly those people, the poorest who

usually get to be neglected."

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Intrinsic motivations: - Positive psychological

effects

- Altruism

- Spiritual sense-giving

Engaging in

philanthropy

Extrinsic motivations:- Social norms, noblesse oblige

- Identifying a need

Findings continued (2d): Overview motivations

Combination intrinsic and

extrinsic:- Contributing to a better world

- Giving back to society

Can be a precursor to


| 1818Introduction Theoretical framework Methodology Findings Conclusions

1.

Philosophy

2.

Selection criteria

3.

Impact


Ph

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thro

pic

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and extrinsic

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Findings continued (3): Philosophy

19

Main theme Unique

frq*

(%)**

Exemplary quotes

Entrepreneurialism 10 (77) “Completely the wrong mentality. It’s always one-way traffic,

nothing ever comes back. At a certain point I was completely done

with that. ‘What did I learn?’ I asked myself - because living is

learning – well, that one cannot just set up something from the

Netherlands and instil Western norms and values. You have to place

the responsibility with the people themselves.”

Personal

engagement

5 (38) “I want to see it myself. At least twice a year I pay them a visit.

Here in the Netherlands I reflect, but it must be done over there.

This exact personal engagement gives me the determination to

continue. Transferring money is way to easy, and next to that, not

fun at all.”

Indifference 1 (8) “Look, what I do at the moment is a hundred euro’s here, a

hundred there. I don’t even know all the things I precisely do and

what I support.”


“Completely the wrong mentality. It’s always one-way traffic,

nothing ever comes back. At a certain point I was completely done

with that. ‘What did I learn?’ I asked myself - because living is

learning – well, that one cannot just set up something from the

Netherlands and instil Western norms and values. You have to place

the responsibility with the people themselves.”

“Look, what I do at the moment is a hundred euro’s here, a

hundred there. I don’t even know all the things I precisely do and

what I support.”


1.

Philosophy

2.

Selection criteria

3.

Impact


Ph

ilan

thro

pic

ag

en

da



and extrinsic

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Findings continued (4): Criteria

21

Main theme Unique

frq. *

(%)**

Exemplary quotes

Scale 7 (54) “I too supported all the large charity institutions, you name them.

Throughout the years however, I dropped them one by one.

Regrettably, indeed. But you know the stories: executive perks,

staggering remuneration... People are more aware nowadays, at least I

am. As to substantial donations, I get more critical by the day.”

Tangibility 7 (54) “At that point I realized, international aid programs are not efficient

enough. I witnessed that the closer you’d bring donor and recipient

together, the larger the impact. So I started to approach international

aid completely different.

Trust 3 (23) “Why do I finally choose for these particular projects? Because I know

about them, I can tell about them, I can also take responsibility for

them. And that is without a doubt the most important factor.”

Transparency 5 (38) “I look for projects that are run responsibly, in which I can be leading.

Any project in which I am subordinate and where I cannot oversee the

cash flows, that itches… […] Because it must add up!”

Legitimacy 4 (31) “Therefore, my main criterion is, first to consult the website, or contact

them... Because of the many charity foundations out there, only a few

really are onto it. And let me tell you this, you must really do

something before you win my support!”


“I too supported all the large charity institutions, you name them.

Throughout the years however, I dropped them one by one. Regrettably,

indeed. But you know the stories: executive perks, staggering

remuneration... People are more aware nowadays, at least I am. As to

substantial donations, I get more critical by the day.”

“At that point I realized, international aid programs are not efficient

enough. I witnessed that the closer you’d bring donor and recipient

together, the larger the impact. So I started to approach international aid

completely different.

“I look for projects that are run responsibly, in which I can be leading.

Any project in which I am subordinate and where I cannot oversee the

cash flows, that itches… […] Because it must add up!”

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Findings continued (5): Thematics

22

Theme Sub-theme Unique

frq*

(%) **

Exemplary quote

Education Elementary education

/ children (East

Africa), higher

education (Africa),

education in Africa

5 (38) "...Kind of like learning companies in post-conflict Uganda,

where the youth either lacks altogether or parts of an

elementary education. They might have had some

education, but there is no work, with youth unemployment

rates of 82%."

Health care Care for disabled

children, healthy

ageing, research (NL)

4 (31) "I find it hard to chew on that some people do not have

access to all what is essentially already there".

Poverty

alleviation

Children ((South East)

Asia, NL)

3 (23) "Children are the future, that's how I see it."

Culture and the

arts

Classical music,

museums

3 (23) "If you build a track record with certain museums and work

together for some time, you are able to organize

increasingly exciting activities - than would ever have been

possible when working with a private individual."

Position of

women

Women (South East

Asia)

1 (8) "Well, Yunus did it differently, he focused on groups of

women. And although Yunus has been a role model for me,

I see it somewhat differently. I also focus on individual

women."

Other The environment,

sustainable food

supplies, renewable

energy.

4 (31) "We take an organic approach: if the context does (not)

allow for it, it will (not) happen. We all but expect to shake

up entire industries with our small scale initiatives."


"Children are the future, that's how I see it."


1.

Philosophy

2.

Selection criteria

3.

Impact


Ph

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and extrinsic

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Findings continued (6): Impact

24

Main theme Unique

frq*

(%)**

Exemplary quotes

Generate

impact

7 (54) “Well, it’s because you want to achieve certain things. Therefore, you

exactly define to what you want to donate. This has allowed us to select

the best of our funding applications. This approach results in two things: 1)

you support the projects you sympathize with, and 2) it signals to others

that these type of projects are doable and if necessary replicable.”

Foster self-

reliance

6 (46) “The goal is to make it mature and professional such that it becomes self-

sufficient, that they can provide in their own funding. Such that the

gains…. Such that an exploitation model emerges for us to let go.”


“The goal is to make it mature and professional such that it

becomes self-sufficient, that they can provide in their own

funding. Such that the gains…. Such that an exploitation

model emerges for us to let go.”

|Introduction Theoretical framework Methodology Findings Conclusions 2525

Findings (7): conceptual model

Philosophy Selection criteria Impact


Laissez-faire

(indifference, one-way

contract, trust)

Idealism

(entrepreneurial,

personal involvement,

two-way contract)

Realism (context)

Scale (direct contact)

Legitimacy (due-

diligence, track record)

Trust

Transparency

Tangibility

Public

(obsolescence, self –

reliance)

Private (having an

impact, positive

psychological effects)

Personal quest

- Contributing to a better world

- Giving back to society

Intrinsic motivations

Extrinsic motivations

Combination

intrinsic

and extrinsic

- Positive psychological

effects

- Altruism

- Spiritual sense-giving

- Social norms, noblesse

oblige

- Identifying a need

NB – Absence of prestige

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Conclusions and discussion

- Personal development as a long-term byproduct of more temporary feelings of

‘warm glow’. What started as investing in the development of others, slowly

becomes an investment in oneself: developing yourself through developing

others.

- Symbolic immortality:

- Prestige absent as motivator: Johanna Elisabeth Blesen, a regent (charity

administrator) in the Dutch golden age, made a gift of 15,000 guilders on the

condition that it should remain a secret until her death (Van Leeuwen, 2012).

- Investing in the future: be it by alleviating (children’s ) poverty, investing in

healthcare or education, or by fostering self-reliance.


"What I now do for others may free up karma. I'm here for a

reason, life is a journey not a destination, we must keep learning

and accomplish many things. I kind of try to build up a reserve,

since there will also come a time when I'll be making up the

balance."

- Informant #12

“Let those who experience abundance be reminded that they are surrounded by thorns, and let them take precaution as to not being wounded by them.” - John Calvin

“The practice of giving money and time to help make life better for other people –

and oneself”

- Online dictionary (suggested definition)

“Embarrassment of the riches”- British historian Simon Schama

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Thankful to contributions from and cooperation by: Dr. Karlijn Massar*, Dr. Paul Smeets, Dr.

Fraukje Mevissen, Nora Smeets PhD candidate, Prof. Dr. Harry Hummels*, Prof. Dr. Rob

Bauer, and finally the Philanthropy Desk at ABN AMRO MeesPieson.

Acknowledgements

Andreoni, J. (1990). Impure altruism and donations to public goods: a theory of warm-glow giving. The economic journal, 464-

477.

Bekkers, R. H. F. P. (2013). De maatschappelijke betekenis van filantropie. Faculteit Sociale Wetenschappen, Vrije Universiteit

van Amsterdam.

Bitzer, J.et al., 2006. Intrinsic motivation in open source software development. Journal of Comparative Economics, 35 160–169.

Clary, E.G. et al., 1998. Understanding and assessing the motivations of volunteers: a functional approach. Journal of personality

and social psychology, 74, 1516-1530.

Duncan, B. (1999) Modeling Charitable Contributions of Time and Money. Journal of Public Economics 72 (2): 213‒242.

Frumkin, P. (2006) Strategic giving: the art and science of philanthropy. University of Chicage Press.

Handy, C. (2007). The new philanthropists: The new generosity. Random House.

Harbaugh, W. T. (1998). What do donations buy?: A model of philanthropy based on prestige and warm glow. Journal of Public

Economics, 67(2), 269-284.

Meier (2006) A Survey of Economic Theories and Field Evidence on Pro‐Social Behavior. Federal reserve bank of Boston

working paper series, no. 06-6.

Plato, Definitions, 412a; translated by author based on Liddell et al. 1961

Schama, S. (1988). The embarrassment of riches: An interpretation of Dutch culture in the Golden Age. Univ of California Press.

Strauss, A., & Corbin, J. M. (1990). Basics of qualitative research: Grounded theory procedures and techniques. Sage

Publications, Inc.

Ostrower, F. (1997). Why the wealthy give: The culture of elite philanthropy. Princeton University Press.

Van Leeuwen, M. H. (2012). Giving in early modern history: philanthropy in Amsterdam in the Golden Age. Continuity and

Change, 27(02), 301-343.

Vesterlund, L. (2006). Why do people give. The nonprofit sector: A research handbook, 2, 168-190.

Yin, R. (2009) Case study research: Design and Methods. Sage, Thousand Oaks, CA.

Work cited

*co-authors manuscript (in progress)

ecce webinar. for the love of humanity: an exploratory study of what drives dutch millionaires to...

Documents

sourcetitleunit of measure

exploratory research

love of humanity

public causes

generous donation of

principles of self help

state of grace chritos

explorative study